The use of paper coupons by consumers to take advantage of discounts offered on purchased items is widespread. In the United states of America, it is a 1.4 billion dollars per year business. However, the use of such coupons brings with it various disadvantages.
For example, from the retailer's point of view, with the sophisticated imaging technology widely available today, printed coupons can be duplicated and made to appear as originals. Consequently, an advertising program based on the potential of a known number of coupons being redeemed can be overwhelmed with a much higher number of redemptions than expected due to such fraudulent copying. Also, coupons are validated by sending them from the retailer to a processing center. The retailer is paid by the advertiser for the coupon amount if the coupon can be properly processed. However, if the processing center cannot read the coupon properly, perhaps due to fraudulent duplication or modification, the retailer sustains a loss because the retailer has already given the discount to the consumer but cannot recover it for itself from the advertiser.
From the point of view of consumers, printed coupons can also be troublesome because sometimes a consumer may forget it at home, or the desired coupon cannot quickly be located in a pile of coupons while the person is at the cash register with a long line of people waiting to check out, and so on. In addition, the desire for a product might be stimulated by a television commercial, but the paper coupon is printed in a newspaper. The time gap from seeing the TV commercial and then coincidentally coming across the right coupon in a newspaper might be so long that the stimulated interest would have diminished in the meanwhile.